'Gaps exist' in PI cover for advisers

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While the market for professional indemnity insurance for advisers is stable and available, gaps exist according to a new report.

An ASIC report has found gaps in the PI market between what the regulator expects and some of the insurance policies available. ASIC's review found some PI insurance policies do not meet the requirements of RG 126.

"Advice businesses must have adequate PI insurance, and they should make sure this cover measures up with our requirements in RG 126. ASIC will follow up with surveillance of advice licensees' PI insurance and if we find problems we will take enforcement action," ASIC Deputy Chairman Peter Kell said.

ASIC undertook the review in response to AFS licensee concerns about securing PI insurance, and the high level of unpaid external dispute resolution scheme determinations. While the regulator did identify concerns, it said it found the market was "basically sound".